Penn Foster 06155200 - Graded Project (J&L Accounting, Inc) Penn Foster 06155200: Graded Project Lesson ...

Penn Foster 06155200 - Graded Project (J&L Accounting, Inc) Penn Foster 06155200: Graded Project Lesson 1: Business, Accounting, and You (J&L Accounting, Inc.)

PROJECT GOAL The goal of this graded project is to create the following financial statements for J & L Accounting, Inc.: - Balance sheet - Income statement - Statement of retained earnings - Post-closing trial balance The financial statements must be created in one Microsoft Word document (.doc or .docx file). Alternatively, an Excel workbook may be used (.xls or .xlsx file). The Word or Excel file will be uploaded for grading.

The following financial statements are provided from the prior accounting period for J & L Accounting, Inc.: a) Post-closing trial balance b) Balance sheet c) Income statement d) Statement of retained earnings

J & L Accounting, Inc. Post-Closing Trial Balance December 31, 2012 BALANCE ACCOUNT TITLE DEBIT CREDIT Cash, Business Checking 20,500.00 Accounts Receivable - Prepaid Rent - Vehicles 48,000.00 Accumulated Depreciation, Vehicles 12,000.00 Equipment 3,600.00 Accumulated Depreciation, Equipment 600.00 Accounts Payable Common Stock 38,000.00 Retained Earnings 21,500.00 Dividends Service Revenue Advertising Expense Rent Expense Office Supplies Expense Telephone Expense Utilities Expense Depreciation Expense TOTALS $72,100.00 $72,100.00

J & L Accounting, Inc. Balance Sheet As of December 31, 2012 ASSETS Cash, Business Checking 20,500.00 Accounts Receivable - Prepaid Rent - Vehicles 48,000.00 Less: Accumulated Depreciation, Vehicles 12,000.00 36,000.00 Equipment 3,600.00 Less: Accumulated Depreciation, Equipment 600.00 3,000.00 TOTAL ASSETS $59,500.00 LIABILITIES Accounts Payable - TOTAL LIABILITIES - STOCKHOLDERS EQUITY Common Stock 38,000.00 Retained Earnings 21,500.00 TOTAL STOCKHOLDERS EQUITY 59,500.00 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $59,500.00

J & L Accounting, Inc. Income Statement For the Month Ending December 31, 2012 REVENUES Service Revenue 10,275.00 EXPENSES Advertising Expense 2,300.00 Rent Expense 1,000.00 Office Supplies Expense 300.00 Telephone Expense 750.00 Utilities Expense 3,200.00 Depreciation Expense 1,100.00 TOTAL EXPENSES 8,650.00 NET INCOME $1,625.00

J & L Accounting, Inc. Statement of Retained Earnings For the Month Ending December 31, 2012 Retained Earnings, December 1, 2012 19,875.00 Add: Net Income 1,625.00 Subtotal 21,500.00 Less: Dividends - Retained Earnings, December 31, 2012 $21,500.00

1) Using the following blank forms (make as many copies as necessary), set up the general ledger accounts for the general ledger and insert the beginning balances for the accounts from the post-closing trial balance. The balances from the post-closing trial balance become the beginning balances of the accounts for the next account period. 2) Journalize the following transactions in the general journal using the following blank form (make as many copies as needed). When making journal entries, each individual journal entrys debits should equal its credits. (The amount for a journal entry can be incorrect or the entry can be incorrect. However, the debits still have to equal the credits even though the entry is incorrect. If the journal entry is incorrect, it can be corrected later when making adjusting/correcting journal entries. For example, if the amount is supposed to be $1,100, and for some reason the amount of $1,010 is recorded, this is acceptablealthough incorrect, it can be corrected later.) The total of the debits must always equal the total of the credits for each journal entryalways. This is a fundamental GAAP that cannot be violated. a. On January 1, 2013, a payment in cash for $12,000 is made for prepaying rent for the entire year 2013. b. On January 4, 2013, accounting services are performed and payment is received in cash for the amount of $1,900. c. On January 9, 2013, a payment in cash for advertising is made in the amount of $850. d. On January 10, 2013, office supplies are purchased in the amount of $75 with cash. e. On January 14, 2013, accounting services are performed and payment is received in cash for the amount of $2,725. f. On January 20, 2013, the telephone bill for the amount of $660 is received and paid with cash. g. On January 20, 2013, the utilities bill for $2,925 is received. The bill wont be paid until it is due on February 15, 2013. h. On January 27, 2013, accounting services are performed on account in the amount of $3,750. i. On January 28, 2013, a payment in cash for $1,500 is made for a bill from an advertising agency. 3) Post the general journal entries from the journal to the corresponding general ledger accounts, paying particular attention to the posting being made (debit or credit). Use the Post Ref. column to ensure that each line item of the journal entries is posted correctly to each general ledger account. Posting from the journal to the general ledger is nothing more than rearranging the information. If the debits equal the credits for a particular journal entry and the information is posted correctly, then the total of the debits should equal the total of the credits in the general ledger. 4) Calculate the balances in the general ledger accounts. 5) Create an unadjusted trial balance from the balances in the general ledger accounts. 6) Journalize the following adjusting journal entries in the general journal, being sure that the debits equal the credits: a. Calculate and make the adjustment for the amount of pre-paid rent that has been used. b. Make an adjusting journal entry in the amount of $1,000 for depreciation of the vehicles. c. Make an adjusting journal entry in the amount of $100 for depreciation of the equipment. 7) Post the adjusting journal entries to the respective general ledger accounts, again being sure that the postings are to the correct debit or credit side and that the Post Ref. column is used. 8) Calculate the new balances in the general ledger accounts. 9) Create the income statement for J & L Accounting, Inc. using the information from the adjusted trial balance. 10) Create the closing journal entries in the general journal to close the revenue, expense, and dividend accounts to the retained earnings account, paying attention to debits equaling credits. 11) Post the closing journal entries to the respective general ledger accounts. 12) Calculate the balances in the general ledger accounts. 13) Create a post-closing trial balance from the balances in the general ledger accounts 14) Create the balance sheet for J & L Accounting, Inc. using the information from the post-closing trial balance. 15) Create the statement of retained earnings for J & L Accounting, Inc. using the ending balance from the statement of retained earnings from the prior period and the net income from the income statement for the January accounting period.

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Asked by an Accounting student, April 25, 2015